Recently, I met a couple who have lived in a neighborhood north of Dallas for nearly 30 years during a consultation. After retirement, their fixed income has decreased, but the property tax bills that rise every year remain a burden, and they are reluctant to leave their beloved neighborhood and the school their grandchildren attend. Many people with similar concerns are now frequently searching for reverse mortgages.

The Dallas real estate market shows significant regional variations. According to real estate company data, as of May 2026, the median sale price in the Dallas area is around $420,000, which is a 2.4 percent increase from the previous year. However, even within Dallas, there is a considerable price difference between North Dallas and the southern areas, with older homes often having substantial equity built up.

A reverse mortgage is a product that allows homeowners aged 62 and older to borrow against the equity in their home. Unlike a traditional mortgage, where payments are made monthly, borrowers receive funds from the lender in a lump sum, monthly payments, or a line of credit. The principal and interest are repaid when the home is sold, the owner passes away, or the home is no longer used as the primary residence.

The most common product is the HECM, which is insured by the Federal Housing Administration. Eligibility requirements include being at least 62 years old, the home must be the primary residence, any existing mortgage balance must be manageable with the loan proceeds, and passing a financial assessment to ensure the ability to continue paying property taxes and insurance.

The advantage is that it provides cash flow for living expenses or medical costs without the burden of monthly repayments. Since it is a non-recourse loan, even if the home value falls below the loan balance later, heirs are not required to pay the excess due to FHA insurance.

However, the first thing I pointed out to this couple was the costs involved. When you add the origination fee, mortgage insurance premium, and closing costs, the initial costs are generally higher than a traditional mortgage. The mortgage insurance premium starts at about 2 percent initially and increases by 0.5 percent each year.

Additionally, the issue of property taxes does not disappear with a reverse mortgage. According to Texas county data, homeowners in the Dallas area pay about 2.2 percent of the assessed value in property taxes annually, including school district, city, and county taxes. Even after obtaining a reverse mortgage, the owner must continue to pay these taxes and homeowners insurance, and failure to do so can lead to default and the risk of losing the home.

As time goes on, the loan balance increases while the homeowner's equity decreases. This means that the assets passed down to children may diminish, so families with inheritance plans should discuss this aspect with their relatives in advance. For reference, Texas has a lower percentage of residents aged 65 and older at 14 percent compared to the national average of 18 percent, indicating that information for retirees in the area may be less well-known and requires careful consideration.

If you are looking for ways to reduce property tax burdens like this couple, it is worth checking out separate relief programs such as the property tax freeze for homeowners aged 65 and older in Texas or the Homestead Exemption. A reverse mortgage is not the only solution, and contacting the county appraisal district can help identify available exemptions.

Also, if you choose the line of credit option, it's worth noting that the unused credit limit gradually increases over time. However, conditions may vary by lender, so it is essential to confirm specifics during the consultation process. Additionally, there are actual scams and exaggerated advertisements targeting seniors related to reverse mortgages, so it is important not to rush into signing just because of a call or visit from an unfamiliar company.

Before applying for a HECM, you must undergo mandatory counseling with a HUD-approved counseling agency. It is advisable to receive thorough information about the cost structure and alternatives during this counseling and to make a decision after discussing it with family. This article is not investment or legal advice, and it is recommended to consult with a HUD counselor and professionals before applying.